Avoid Free Credit Report Scams
Nowadays it seems that every channel you tune into, there's a commercial for a different company offering you a free credit report. I don't know about you, but most of the time, when a for-profit company is advertising something, it's because there's a sale attached to it. There's no way the bean counters at any well-run company will keep green-lighting an advertising campaign if said campaign is not turning a profit. And why do all those companies act like they're looking out for our best interests by offering us a free credit report? What's in it for them?
Common sense tells us that if the ads keep airing, it's because the campaigns are successful in reeling in new customers. At the same time, almost everyone knows that there's no such thing as a free lunch and that "free" is often a bait that scammers use to lure in unsuspecting victims. In that regard, it's relevant to wonder if those offers are really free? Free as in no monetary exchange whatsoever.
To make a long story short, the answer is that very few of them are really free. But anyone with a minimum of common sense could have figured that out, so we're going to go into a bit more detail here, without putting you off by being overly technical. We will start off by telling you that very few free credit report offers are really free, but there are surefire ways to tell which ones are and which ones aren't.
By now you can probably tell that most of these free credit reports offers have a cost. Most of the major banks and lending firms offer "free credit reports" that are really subscription services (which offer anytime access to your report) offered either by them or by one of the major credit bureaus that they have a partnership with. Those three credit bureaus are Equifax, Experian, and Transunion. While there are more than three credit bureaus, those three are the ones that count and which all companies get their information from and report to.
Many of the free credit report offers come from another industry that has been largely fueled by the rise of identity theft: we're referring to the "identity protection" businesses. Because of the large amount of publicity gathered by the people who have fallen victim to identity theft, people are more inclined to check what's in their credit report and many of them focus on the "free" part of the offers that are advertised to them. Yet the fine print on these offers makes it pretty clear that upon signing up, you're also enrolling for some sort of credit monitoring service, at a cost of $6.95 to $19.95 per month, for a period of three months to a year. The service alerts you of suspicious activity on your account, reports credit inquiries suppsedly made by you, and notifies you of late-payment notices that pop up on your account.
For a few years now, the major credit bureaus are under legal obligation to each furnish you with a free credit report every year. That's three credit reports per year. But you have to ask for it, since their obligation is only to provide you with it IF you ask for it. There are three ways to get it: by phone, by mail, or online. In all three cases, you have to follow specific instructions so that your totally free credit reports gets delivered to you.
You can legally request a free credit report if a company denies your credit, insurance or employment application based on information that was in said report. Just know that you have 60 days from the date this happened to make your request. Unemployed people are also eligible for a free credit report every year, provided that they're planning to look for a job within 60 days. Finally, if you're on welfare, or if you have reason to believe that your credit report contains errors, you can also request a free credit report and it will be sent to you.
When it comes to competition, few industries push it to the level that banks do. Keeping current customers from going to the competitor and/or bringing them in from the competition requires ever-improving offers. That has prompted many banks to offer stripped-down versions of credit monitoring services as part of their services, as a reward for doing business with them. The terms vary but usually all you have to do is get approved for their credit card or open some type of account with them and you're good to go. Similarly, the companies that serve the high-end market (like, for example, American Express) also strive to offer their customers a complete suite of financial services, which almost always includes credit report access and monitoring.
Some people only use credit sparingly. They have no need for continuous monitoring of their credit reports or anything like that. If that's you, all you need to do is to ask one credit bureau for a credit report every 4 months, just so you can check that your accounts are accurate and that you haven't fallen victim to identity theft. If you need more than that basic level of monitoring, then you can turn to the companies that offer such services in their package deals so that you don't have to pay extra for it.
With so many aspects of your life being impacted by your credit report (credit, insurance, employment), there's no need to stress the importance of monitoring your credit report. Should you spot any errors, you should definitely take action as soon as possible to correct them. And there's no reason why you shouldn't be on top of this: odds are, you won't even have to pay to get your credit reports.
Common sense tells us that if the ads keep airing, it's because the campaigns are successful in reeling in new customers. At the same time, almost everyone knows that there's no such thing as a free lunch and that "free" is often a bait that scammers use to lure in unsuspecting victims. In that regard, it's relevant to wonder if those offers are really free? Free as in no monetary exchange whatsoever.
To make a long story short, the answer is that very few of them are really free. But anyone with a minimum of common sense could have figured that out, so we're going to go into a bit more detail here, without putting you off by being overly technical. We will start off by telling you that very few free credit report offers are really free, but there are surefire ways to tell which ones are and which ones aren't.
By now you can probably tell that most of these free credit reports offers have a cost. Most of the major banks and lending firms offer "free credit reports" that are really subscription services (which offer anytime access to your report) offered either by them or by one of the major credit bureaus that they have a partnership with. Those three credit bureaus are Equifax, Experian, and Transunion. While there are more than three credit bureaus, those three are the ones that count and which all companies get their information from and report to.
Many of the free credit report offers come from another industry that has been largely fueled by the rise of identity theft: we're referring to the "identity protection" businesses. Because of the large amount of publicity gathered by the people who have fallen victim to identity theft, people are more inclined to check what's in their credit report and many of them focus on the "free" part of the offers that are advertised to them. Yet the fine print on these offers makes it pretty clear that upon signing up, you're also enrolling for some sort of credit monitoring service, at a cost of $6.95 to $19.95 per month, for a period of three months to a year. The service alerts you of suspicious activity on your account, reports credit inquiries suppsedly made by you, and notifies you of late-payment notices that pop up on your account.
For a few years now, the major credit bureaus are under legal obligation to each furnish you with a free credit report every year. That's three credit reports per year. But you have to ask for it, since their obligation is only to provide you with it IF you ask for it. There are three ways to get it: by phone, by mail, or online. In all three cases, you have to follow specific instructions so that your totally free credit reports gets delivered to you.
You can legally request a free credit report if a company denies your credit, insurance or employment application based on information that was in said report. Just know that you have 60 days from the date this happened to make your request. Unemployed people are also eligible for a free credit report every year, provided that they're planning to look for a job within 60 days. Finally, if you're on welfare, or if you have reason to believe that your credit report contains errors, you can also request a free credit report and it will be sent to you.
When it comes to competition, few industries push it to the level that banks do. Keeping current customers from going to the competitor and/or bringing them in from the competition requires ever-improving offers. That has prompted many banks to offer stripped-down versions of credit monitoring services as part of their services, as a reward for doing business with them. The terms vary but usually all you have to do is get approved for their credit card or open some type of account with them and you're good to go. Similarly, the companies that serve the high-end market (like, for example, American Express) also strive to offer their customers a complete suite of financial services, which almost always includes credit report access and monitoring.
Some people only use credit sparingly. They have no need for continuous monitoring of their credit reports or anything like that. If that's you, all you need to do is to ask one credit bureau for a credit report every 4 months, just so you can check that your accounts are accurate and that you haven't fallen victim to identity theft. If you need more than that basic level of monitoring, then you can turn to the companies that offer such services in their package deals so that you don't have to pay extra for it.
With so many aspects of your life being impacted by your credit report (credit, insurance, employment), there's no need to stress the importance of monitoring your credit report. Should you spot any errors, you should definitely take action as soon as possible to correct them. And there's no reason why you shouldn't be on top of this: odds are, you won't even have to pay to get your credit reports.
About the Author:
We strongly suggest that people get a no trial credit report, instead of having to pay for the service. For more of the same type of money-saving tips, feel free to drop by our personal finance blog.
posted by Credit Counseling at
5:35 AM
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